Volume 7, Issue 11, November – 2022 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Inter-Island Maritime Trade Dynamics and the

Role of KPM of Sulawesi at the Beginning of the
20th Century
Nahdia Nur1
Hasanuddin University, Indonesia

Abstract:- The southern part of Sulawesi played a very network. In addition, there is also a north-south trade
important and significant role in forming trade networks network, that is, shipping in this network is centered on
and economic integration between the 1900s and 1930s. Chinese maritime trade (Poelinggomang, 2004).
Dynamics, change, and development are the main
subjects of this research. This research aims to 1) reveal Developments and new trade centers, free trade policies
the dynamics of inter-island maritime trade and the role and the use of ships in the maritime world also have broad
of KPM in Sulawesi, early 20th century, and 2) inter- implications for shipping lanes and trade networks in
regional economic development activities in southern Sulawesi. Trade network activity in this region is through
Sulawesi, early 20th century. This research used rivers and seas centered on the coast and ports. The port
qualitative method. The result of this research is revealing which refers to the economic concept, it has function as a
the dynamics and development of maritime trade in South center for exchanging goods or for the entry and exit of trade
Sulawesi at the beginning of the 20th century. The free goods. Indigenous seafarers who still play an important role
trade policy that was implemented to a certain extent was in indigenous boat shipping amidst the expansion of
able to increase trade enthusiasm, especially in the steamships are the Bugis, Makassarese, Mandarese and
southern part of Sulawesi. The Dutch Government's Butonese (Murphey, 1989). Their area of operations is very
political intervention was quite flexible since the early broad, covering almost all regions and ports in the
20th century, making it easier for it to develop new archipelago. The boats of these native traders could anchor at
economic policy directions. Local elites were successfully all ports of the Dutch East Indies. This gives flexibility for
exploited in realizing economic networks and integration. Bugis-Makassar ships to conduct shipping and trade. Ports in
Thanks to the government's transportation capability, the Sulawesi region have become lively again as indigenous
through its Shipping Companies (KPM), the main routes shipping networks in the regions and in remote parts of the
of trade can be controlled as well as being able to control interior (Saleh, et al., 2021).
the movement of trade commodities. Moreover, Makassar
serves as a transit and storage center for various trading Furthermore, an inland area will have a functional
commodities, both for shipments outside Makassar, as relationship, either directly or indirectly with the port. In
well as various goods that will enter this area. This Dutch other words, for inland areas, ports function in offering
economic policy allowed it to explore existing economic trading volume to attract ships for trade from and to the
resources and channel them through controlled channels. interior. According to Broeze (1986), the main impact of a
port's activities is the economic field, which makes the
Keyword:- Trade Network, Makassar, Economic Integration, location of a port explain the regional hegemony network
Commodities. over interconnected cities. One of the variables of the
economic activity of a very important port is trade. The trade
I. INTRODUCTION will develop or not, determined by the role played by traders,
especially the role of intermediary traders between regions,
A. Background of study both individually and in groups with buyers (Lapian, 1975;
Indonesia's territory is divided into maritime trade Andini., et al, 2021). Trading activity takes place is a social
zones, namely, the northern and western coastal areas of phenomenon in an economic activity so this research is
Sumatra and they are included in the Malacca Strait trade important to do because it will reveal the dynamics and
zone, while the rest are classified as the Java Sea trade zone. development of trading activities in South Sulawesi in the
According to Hall (2019) that around the 14th century and the 20th century (Tahir , et al., 2018).
beginning of the 15th century, maritime trade zones
(commercia Izones) had formed in Southeast Asia. Basically, B. Theoretical Review
every trade network has a specific pattern of development of The study of the history of trade and economic
the exchange of trade products. These trading patterns will be integration is a network that has been built for a long time.
divided into five trading forms, 1) inside trading, 2) foreign According to Dick (1989) a maritime economic study that
trade, 3) third, trading with boats, 4) trading with canoes and sees the importance of trade networks in forming islands in
5) trading using animals, such as cows, buffaloes and horses. the archipelago. The trade network of ethnic groups through
However, trade relations also took place between these the main media has used sailboat transportation, and it
trading networks. East-West trading network and vice versa supports the formation of a trade network (Aslanian, 2014).
by placing the network closely related to the spice trading In the early 20's in the Dutch East Indies, traders who used

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Volume 7, Issue 11, November – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
sailboats had formed ethnic group solidarity and played a and it formed the foundation for post-war economic
very important role in dealing with the KPM monopoly, with development.
the spirit of solidarity, ethnic traders such as the Bugis,
Makassar, Buton and Madurese made them survive on the Several aspects of Asian entrepreneurship have recently
voyage and even controlled shipping places that were not received attention, for example the importance of informal
reached by the KMP. overseas networks of Chinese emigrants. The development of
the domestic market was important for the integration of the
In addition, the inefficiency in the field of inter-island Archipelago and was largely a consequence of native export
shipping which took place in a very complex integration production. European plantations, agricultural or mining
context, and the crisis that occurred in the process of inter- companies had direct foreign links and were not dependent
island shipping stemmed from the conditions that were built, on local trade networks. Farmers who become active in
preserved and abandoned by the Colonial Government (Dick, agricultural exports interact with the wider economy of the
2006; ).(Hasnia, et al., 2022). archipelago. Colonial economic integration was enhanced by
Asian trade networks and it is fair to say that, outside of Java,
In line with that, Italiane (1986) in the Traditional colonial state formation lagged behind, but driven by the
Trading Networks of Southeast Asia, defines the notion of a expansion of exports abroad more coherent national economy
trading network, 1) there is a trade network between an ethnic was developing (Nahdhiyah et al., 2022).
group that is formed, due to trading activities between
regions, or between the same religious groups, not because of In describing this new discourse, Broek (1942) relates
the trade that was encouraged because of the emergence of to the emerging economic problems, between 1929 and 1939,
trade alliances. 2) A trade network formed due to ongoing the ratio of the value of trade between Java Island and areas
trade alliances able to form an existing trade network route outside Java to the value of foreign trade increased from 12%
and third, it is a trade network that can occur due to changes to 17%. The value of trade between the island of Java and the
in the trading network, which occur at any time, whether due regions outside Java has declined compared to the value of all
caused by production systems, markets, or because of the foreign trade, namely only one-third compared to the decline
emergence of new transportation (Evers, 1988; Sugiyartati, et in foreign trade. According to Broek (1942) the world crisis
al., 2020). marks the end of a period of growth, not only for economic
development, but also for economic policy. Economic
In terms of the network, when it is related to this nationalism increased and fostered a belief in free trade that
research, the network of production and export commodities was unsustainable for the government to change the course of
that exist in South Sulawesi is analyzed through several its economic policies.
meanings covering the areas of production of commodities in
the Greater East region. Commodities coming from these On the other hand, in the southern part of Sulawesi could
remote areas were immediately brought to other areas and did be like Boeke (1953) states that economic dualism, that the
not eliminate the boundaries of island territories for these Dutch East Indies society presented two separate faces from
commodities, but reached groups of islands and their network one another, both are rural communities who live simply with
to the world market (Kadir, 2018).The production areas an economy to meet their own needs and urban communities
include Palopo, Selayar, Balangnipa, Siwa, Bantaeng, dominated by European (Western) elements who live in
Watampone, Majene, Bau-bau, Kendari, Buton, Pallima, luxury with an advanced economy. In conclusion, the first is
Sinjai, Bonerate, Selayar, Bulukumba, Bantaeng and Maluku. static and difficult to develop and the second is dynamic.
Furthermore, the production was sent to other areas, Furthermore, he stated that the population of the Dutch East
including Makassar, Ampena Bali, Buleleng, East Indies had a wider need for protection because of the dualistic
Kalimantan, Surabaya, Singapore and others is exported and nature of the Dutch East Indies society, so that more and more
these commodities emphasize inter-inland, inter-regional, native people were cornered. Boeke saw the crises of the
inter-island, inter-port and inter-world market networks. 1930s as cutting and dualistic economic policies much
needed in the long term.
In this regard, Jeroen's study "The Colonial
Interregional Trade in Indonesia, 1900-1940: Serving In this regard, Creutzberg (1915) emphasized in four
Overseas Markets, Favoring Integration Into A Colonial editions which contain source material on economic policy in
State" writes that the interaction of Indonesian and Chinese the Dutch East Indies. Many topics are relevant in providing
entrepreneurs has become very important for the Indonesian an overview of economic policies during the 1900-1942
economy. In the post-war growth economy fueled by exports periods. There are five aspects of economic policy chosen to
and consciously pursuing industrialization, Asia's trade be discussed in emphasizing the development and nature of
mechanisms plays an important role, even with all the this policy, namely welfare politics, the rice problem,
problems of divisions between ethnic groups and their industrialization as a substitute for imports, the recession of
different economic roles (Jeroen, 2005). The role of Chinese 1919-1921, and the depression of the 1930s.
traders through stimulating local entrepreneurship,
distributing imports, and acting as credit bankers, Paauw (1963) revealed that during the 1930s the growth
intermediary trade networks were important in the increasing of inter-island trade was only an economic recovery in 1929
cohesion of the pre-war Indonesian economy. The strong because inter-island transport was only slightly higher than in
development of the Asian trading sector in colonial Indonesia 1920. The growth rate of cargo local private commodities

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Volume 7, Issue 11, November – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
transported by KPM only increased by 13% during that Makassar was also declared to have trade relations with the
decade, at a growth rate of approximately 1.5% a year (Booth Portuguese in Malacca (Pires, 1991).
et al., 1988)
Even though the influence of the Dutch East Indies
The most important thing from the existing analysis is government was not strong before the end of the 19th century,
the theory of trade networks will be used to analyze networks South Sulawesi was already connected with world activities,
and trade in this part of South Sulawesi (Italiane, 1986). This in which exported commodities penetrated European
theory emphasizes the mechanism of exchange of goods, both markets. Then South Sulawesi returned to get new
on a small scale and across geographic areas, as stated by enthusiasm with the development of the economics of coffee
Lindblad (1998) that the outside economy increased rapidly and coconut trading materials. At this time colonial expansion
in the early 20th century due to its integration with the center had been launched in the islands which had an impact on the
of the world. development of road facilities to the interior areas. This
situation seems to encourage the development of traders, the
II. RESEARCH OBJECTIVE widespread use of money and the emergence of markets to
remote rural areas. In inter-island trade, ports, the KPM
This study aims 1) to reveal the dynamics of inter-island shipping organization played a very important role which
maritime trade and the role of KPM in Sulawesi, early 20th integrated with the Dutch colonial expansion in the islands,
century, and 2) to analyze inter-regional economic activities all of this brought changes in trade patterns. Therefore, under
in southern Sulawesi, early 20th century. the supervision of the Dutch East Indies Government, each
port in its network of trading centers had different variations.
III. RESULT AND DISCUSSION For example, how the population's economy develop, groups
of traders and inter-island traders took place before and after
A. Trade in South Sulawesi receiving influence from the KPM network in the islands.
There are three integrated livelihood sectors in
Sulawesi, namely agriculture, shipping and trade. These three This network system provides an indication that the
areas supported the people's economy, especially in South development of ports in this region is the center of
Sulawesi, when Bugis, Makassar, Javanese and Malaccan commercial activities which is determined by several factors,
traders expanded their search for trade materials to areas in including its strategic location and its position in the middle
southern Sulawesi and had an extraordinary impact on the of the world of trade. Then the intervention with the arrival
development of the trade network at Makassar Port (Jeroen, of the Europeans provided opportunities for traders and
2005). One of the factors makes Makassar Port very strategic shifted their activities to Makassar. This is coupled with the
and visited a lot because Makassar is a trade center in the role of residents in other areas as traders and sailors who
Greater East Region. Most of the commodities are exported make voyages to other production areas and trading ports
through the Port of Makassar and the trading activity is using boats and ships.
increasing with the arrival of traders from other areas
(Poelinggomang, 2022). Bugis-Makassar traders also sailed Meanwhile, trading activities in several coastal cities in
on trade voyages, with other trading centers all the way to Southeast Sulawesi, such as the port cities of Bau-Bau, Raha,
Australia. Kendari, and Kolaka, serve as a collection point for
commodity products that are traded at certain times.
Since the 19th century, trade relations with other regions Southeast Sulawesi's economic development in the early 20th
and areas have made Makassar have an important function in century was dominated by agriculture, trade and shipping.
commodity trading. Commodities are shipped from Makassar This is what supports the economy of the people of Southeast
to other areas and create trade contact routes with the outside Sulawesi in supporting the exploration of economic resources
world as well as creating important traffic in Makassar such as intensification of agriculture, plantations, opening of
(Poelinggomang, 2004). There are three defined routes, mines. This area is also visited by many ships, especially the
namely 1) Surabaya-Makassar-Amboina-Banda-Buru- KPM ship. KPM's ship network includes Pare-pare, which
Bacan-Ternate-Gorontalo-Manado-Amarung-Tolitoli- has transported rice originating from the interior of South
Parepare-Makassar and Surabaya, 2) Makassar-Bantaeng- Sulawesi and to several ports in Sulawesi, Maluku as well as
Bulukumba-Selayar-Sinjai-Palopo-Buton-Kendari-Makassar East Kalimantan. Traders who are oriented to inter-island
and returns via the same route and, 3) Makassar-Bima- trade can use the sailing boats in this area and have also
Nangamessi-Sabu-Rote-Kupang-Atapupu-Larantuka- contributed to the smooth transportation of commodities, in
Maumere-Bima and back to Makassar. which spice commodities that must be handed over to the
Dutch government are paid at a set price and benefit it
This policy of expanding trade relations succeeded in (Andini et al., 2022).
realizing the goal of positioning Makassar as the only trade
center in the region. It gave rise to power as the thriving B. Economic Activity
maritime kingdoms controlled trade. Bugis, Makassar, There are two major centers of economic activity in
Selayar, Malay and European traders and sailors who made South Sulawesi. One is in a market under Dutch colonial rule,
commercial voyages made Makassar a port of call. The and the second is in the Port of Makassar. Goods from all over
production market also establishes relationships with other the Indian Archipelago were transported in both places. This
trading ports located in the East, South, West and North parts. trading network has a relationship with the economic area

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Volume 7, Issue 11, November – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
controlled by the Dutch government in the north of Makassar IV. CONCLUSION
and the area around the capital of the Dutch power. This trade
also involved several kingdoms that still held autonomy The progress of trade in the Sulawesi region especially
rights based on the Bungaya Agreement, namely the Makassar, cannot be separated from the launching of the Port
Kingdoms of Wajo, Sidenreng, and Bone (Mappangara, of Makassar as a taxpayer port. There were two centers of
2017). economic activity at that time, one in the market which was
under Dutch Colonial rule, and the second was in the Port of
Makassar's main trade is not only rice but also copra. Makassar. The Dutch East Indies government led traders to
Copra which is processed into oil is the most salable stop at this port which was used as a trading center. This
commodity in the world market. Because of this, in 1917 the progress is also supported by the presence of KPM which has
copra storage warehouse was expanded by about two a broad reach. Small ports that were not reached by KPM
kilometers to the exit from the Port of Makassar, namely, in became land for native traders whose space for movement
Kampung Maroangin near Poetere. This copra warehouse became narrower with the declaration of the Port of Makassar
expansion signals that OFI Makassar has grown. This is as a taxpayer port since 1906. Apart from that, trading
because the oil produced by OFI continues to grow from year activities also took place on land. The traders reach areas that
to year, and in purchasing copra OFI has the support of the produce export production, along with the transportation
Makassar branch of Javasche Bank and at least the Javasche system that is getting better.
bank issues f.1,500,000 credit each month to entrepreneurs
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